The Discipline of Economics

Anna wants to buy both a coffee and a donut, but she only has enough money for one. She chooses coffee. What is the opportunity cost?

• The money she spent

• The donut

• The coffee

• Her hunger

Answer explanation

Opportunity cost is the next best alternative you give up when you make a choice. Since she chose coffee, the donut is what she sacrificed—her opportunity cost.

During a typhoon, bottled water prices rise due to high demand.
What economic principle does this show?

• Inflation

• Scarcity

• Opportunity cost

• Production

Answer explanation

Bottled water becomes limited due to panic buying or supply disruptions. This scarcity increases prices as demand rises and supply remains tight.

You only have ₱100. You buy a meal instead of a cellphone load. What kind of economic decision is this?

• Budgeting

• Scarcity

• Trade

• Needs vs. Wants

Answer explanation

This is a decision between a basic need (food) and a want (cellphone load), highlighting the difference between essential and non-essential goods.

The city must choose between building a school or a hospital.
What concept is applied here?

• A. Allocation of limited resources

• B. Inflation

• C. Wants vs. Needs

• D. Specialization

Answer explanation

The government has limited resources and must allocate them wisely. Choosing one option means forgoing the other, demonstrating economic trade-offs.

A student chooses to spend the evening doing a paid online job instead of watching movies.
What is the opportunity cost?

• A. The money earned

• B. The time spent working

• C. The movie he didn’t watch

• D. Internet usage

Answer explanation

The opportunity cost is the enjoyment and time he could’ve spent watching the movie. It’s what he gave up for the benefit of earning money.

A farmer decides to grow rice instead of corn due to market demand.
What economic concept is at play?

• A. Consumption

• B. Resource allocation

• C. Specialization

• D. Inflation

Answer explanation

The farmer is allocating land and labor resources toward the more profitable crop (rice), which is an economic decision based on demand.

A household chooses to cook meals at home instead of dining out.
What does this show?

• A. Luxury spending

• B. Scarcity of food

• C. Wise decision-making

• D. Increase in demand

Answer explanation

Choosing home cooking helps save money and manage limited resources, showing rational economic decision-making based on family priorities.

Electricity rates increase, so families start using fans instead of air conditioners.
This is an example of:

• A. Substitute goods

• B. Demand increase

• C. Capital investment

• D. Inflation

Answer explanation

When the price of one good (AC usage) rises, people switch to a cheaper substitute (fans). This shows how price affects demand for alternatives.

A barangay builds a gym but delays road repairs due to lack of funds.
What is the trade-off?

• A. The gym

• B. The cost of labor

• C. The road repairs

• D. Government planning

Answer explanation

The road repairs are the opportunity cost—the benefit that had to be given up in favor of the gym, due to limited public resources.

The government provides free education.
This is an example of what type of economic activity?

• A. Public good

• B. Capitalism

• C. Entrepreneurship

• D. Inflation control

Answer explanation

Education, when provided by the state for free, is a public good—non-excludable and beneficial to society, funded by taxes.